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CSEET · Economic and Business Environment · Elements of Corporate Governance

In Meera Industries Ltd, minority shareholders hold 8% of shares, yet the promoters pass a related-party deal on terms unfavourable to the company without proper disclosure or independent scrutiny. Which pair of governance principles is most clearly breached?

Fairness and transparency are breached. Fairness requires equitable treatment of all shareholders, including minorities, and the deal harms them. Transparency requires proper disclosure and independent scrutiny of related-party transactions, which was missing. The other pairs are structural or management concepts, not governance principles.

  1. AFairness (equitable treatment of shareholders) and transparencyCorrect
  2. BEfficiency and economies of scale
  3. CLimited liability and perpetual succession
  4. DDelegation and centralisation

Explanation

Unfavourable terms imposed on minority holders breach fairness, meaning equitable treatment of all shareholders. The lack of disclosure breaches transparency. Limited liability, perpetual succession, delegation and centralisation are company-law or management concepts, not the principles at stake here.

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